Sales of previously owned homes inched 0.2 percent higher in September, setting a new record, a trade group said today. The gains came entirely in the Northeast.
Existing home sales sold at a seasonally adjusted annual rate of 4.32 million units, up from a revised 4.31 million in August, the National Association of Realtors said.
It was the highest level since the group began tracking sales in 1968. Most economists had been expecting about a 1.2 percent drop.
Strong economic growth and plentiful jobs are giving Americans the wherewithal to buy homes, and mortgage rates are near the low point for the year, making homes more affordable.
The Department of Housing and Urban Development said last week that the nation's home ownership rate rose to a record 66 percent during the July-September quarter.
The median price of an existing home, meaning half sold for more and half for less, was $125,600 in September, up 6.6 percent from a year earlier.
By region, sales jumped 11.7 percent in the Northeast to a seasonally adjusted annual rate of 670,000. They were unchanged in the South at 1.64 million. They fell 2.8 percent in the Midwest to 1.09 million and dropped 4.1 percent in the West to 940,000.
"The main factors pumping up the markets are job stability and willing consumers," said Russell Booth, president of the realtors association.
Ian Borsook, economist at Merrill Lynch, said, "Although we expect the rise in the housing market to peter out towards the end of the year, rates have been declining and this has boosted the market."
Home resales make up about 85 percent of all U.S. single-family home sales. Demand for houses -- new and old -- is a key indicator of economic activity because once homes are sold, owners tend to buy products that range from furniture and appliances to garden supplies.
Analysts and builders point to low mortgage rates, lean inventories, a low rate of unemployment, high consumer confidence and new tax laws as signs housing will continue to grow.
"Consumer confidence is strong, rates are at affordable levels and people are employed," said Stuart Miller, president and chief executive of homebuilder Lennar Corp. "All those things bode well for the housing industry."
A recent drop in the value of stocks around the world also may bolster demand for houses, analysts said.